Product Description

This is a sceptical history of the internet/stock market boom. The author argues that the dot.com craze wasn't simply a stock market bubble; it was a social and cultural phenomenon driven by broad historical forces. Cassidy explains how these forces combined to produce the buying hysteria that drove the prices of loss-making companies into the stratosphere. Much has been made of the phrase "irrational exuberance", but this text shows that there was nothing irrational about what happened. The people involved - fund managers, stock analysts, journalists and pundits - were simply acting in their own self-interest. Technology provided the raw material for the boom, but that is only part of the story. This book describes and explains the all-too-human behaviour of the stock market bubble: how it got going; sustained itself for longer than anybody expected; and then, just when people were starting to think it might not be a speculative bubble after all, went pop.

Product Details

• Amazon Sales Rank: #500237 in Books
• Published on: 2002-01-31
• Original language: English
• Binding: Paperback
• 400 pages

Amazon.co.uk Review
John Cassidy's Dot.con is the most sweeping and definitive assessment published thus far of the stock market mania that swept this country in the late 1990s. Cassidy, who covers economics and finance for The New Yorker finds many seeds for the boom: Vannerver Bush's "memex" machine, the "intellectual forerunner of the World Wide Web"; increasing popularity of 401K and IRAs, which introduced millions of Americans to the equity markets, giving rise to a "stock market culture"; and the attention and hype in the late 80s and early 90s surrounding the "information superhighway" promoted by the likes of Al Gore, Newt Gingrich and Nicolas Negroponte. When Netscape went public in 1995, the Internet-mania began a five-year run that was fueled in part by the media, the policies promoted by Alan Greenspan and the Federal Reserve, the rise of day trading and the deluge of IPOs brought to market by firms such as Morgan Stanley and Merrill Lynch and their analyst cheerleaders Mary Meeker and Henry Blodget. For anyone who got caught up in the mania and foundered in its eventual crash, Dot.con is a bittersweet trip down memory lane that Cassidy captures just perfectly. --Harry C Edwards

The Guardian
“Admirably lucid and comprehensive”

The Economist
“Thoroughly persuasive”

Customer Reviews

An excellent read. You couldn't make it up, really.
From the first couple of chapters, in which Cassidy takes the reader through the workings of market booms and crowd madness, and also gives an extremely useful, potted history of the thinking that led to the internet (WW1 is where it starts, sort of), it's a knuckle-whitening ride through the blizzard of claims, conflicting interests, spiralling expectations and reckless bets that created, sustained and drove the dotcom boom to ever sillier, more precarious heights. The tension as the inevitable crash approaches is handled like a master novelist, never mind a financial journalist. Really excellent book. Captures the moment when everyone seemed to be a dotcom millionaire - and the moment shortly afterwards when no-one was - perfectly. I loved this. Kept missing my stop on the London Underground because of it anyway.

Isn't hindsight great?
It was interesting to read another person's account of the situation, especially since I worked in the industry during the dot.com peak. The narrative style accurately captures the mounting frenzy that pervaded both the US and the UK and abundance of facts presented provides an extremely frustrating hindsight.

To my mind, this book is essential reading for anybody interested in the Internet sector, as well as anybody who wants to learn a little more about the "workings" of the stock market.

After reading the book it's clear to see why many investors have become extremely cautious over the past few years.

Competent but not without flaws
The first thing you'd say about this book is that, however clever the title, it's erroneous: this isn't the story of a "con" at all, it's the story of a speculative bubble.

The whole point is that no-one was "conned" by the hot air. As Cassidy mentions from the outset, the prospectuses all contained large print health warnings in prominent places: "THIS COMPANY HAS NEVER MADE ANY MONEY, MOST LIKELY NEVER WILL" - but the punters still bought and bought. There were many psychological and sociological factors at play, but deception was not one of them.

For all that, Dot Con is well researched, well written and entertaining into the bargain (my copy was the paperback second edition in which the typos & manifest errors spotted by keen Amazonians (none of which, in my view, was earth-shattering) had been corrected). Cassidy describes briefly and competently the history of the internet and the general financial environment of the last 50 years, and then takes you into the maelstrom of the bubble from 1995 to 2001, all of which he portrays in suitably stunned-mullet fashion. The new edition features a lengthy epilogue which surveys the wreckage and covers the subsequent inquiry into the practices of investment banking firms and their uneasy relationships with their research analysts, all of which is still very current.

While he doesn't really dwell on it, I think Cassidy would come out in favour of more market regulation and intervention: He's especially critical of the Fed's approach to monetary policy and the atmosphere on the street which led to the boom in the first place.

In some ways (though it's hardly fashionable to say so) the investment banking firms and fund managers were as much victims of this as anyone: while the roof is blowing off the market and the choice is to join in and make hay, or watch your competitors annexing large portions of your market share while you sit on your hands, it is a singular Wall Street firm indeed which chooses to sit the boom out.

In any event this is a thoughtful and well put together book and serves as a pretty good overview of some of the most remarkable times in the history of modern finance.